Canada got some good economic news for a change Tuesday at a speech in Halifax.
Mark Carney, Governor of the Bank of Canada, told the Halifax Chamber of Commerce that the country will likely avoid massive inflation.
Carney said Canada’s banking system is strong and the Bank of Canada has room to maneuver on controlling inflation.
“The bank began cutting interest rates sooner – and has cut deeper – than most other central banks. With the usual lag, these moves will have a powerful impact on economic activity and inflation.”
Carney’s outlook was downright rosy by recent standards. He expects the economy to begin recovering later this year. While he conceded Canada’s GDP will drop a projected 1.2 per cent in 2009, he expects a 3.8 per cent rebound in 2010.
In the meantime, Carney said the central bank would use its powers to keep inflation at two per cent per year.
“While the current financial crisis presents challenges for policy-makers and citizens alike, Canada faces those challenges from a position of strength,” said Carney.